- India August WPI food YY increase to -1.13 % vs previous -1.2 %.
- India august WPI Inflation YY decrease to -4.95 % (forecast -4.40 %) vs previous -4.05 %.
- India august WPI fuel YY decrease to -16.5 % vs previous -12.8 %.
- CFTC - Specs boost net USD longs latest week but trim bearish JPY bets, EUR shorts up large.
- Lesson for Fed- Higher interest rates haven't been stocking.
- Fears grow over US stock market bubble.
- BIS - Worries over emerging markets deepening.
- BoJ to stand pat even as goals depart from reality.
- China economic growth sputters in August, more support measures seen.
- China issues state-firm reform plans, to push "mixed ownership".
- China banks' Q1 capital outflow $109 bln, may persist.
- China August retail sales +0.86% m/m, +10.8% y/y, +10.5% eyed.
- China August industrial output +0.53% m/m, +6.1% y/y, +6.4% y/y eyed.
- China August fixed-asset investment +10.9% y/y, +11.1% eyed, property investment +3.5% in year to August, year to July +4.3%.
- Record percentage of Asian companies destroying shareholder value.
- BoE MPC Weale - Rates need to rise relatively soon.
- ECB Coeure - QE to run to September '16 or beyond if necessary.
- Swedish CB-Keep rate low despite economic growth.
- (0315 ET/0715 GMT) Switzerland August producer/import prices; last -0.3% m/m, -6.4% y/y.
- (0400 ET/0800 GMT) Italy August CPI final, +0.2% m/m, +0.2% y/y eyed; flash +0.2%, +0.2%.
- (0400 ET/0800 GMT) Italy August HICP - final, unchanged m/m, +0.5% y/y eyed; flash unchanged, +0.5%.
- (0500 ET/0900 GMT) Euro zone July industrial production, +0.3% m/m, +0.6% y/y eyed; last -0.4%, +1.2%.
Key Events Ahead
- N/A BOJ Policy Board meeting begins (policy announcement tomorrow).
- N/A Germany E2 bln 6-month Bubill, Norway NOK8 bln 1-yr NST32 auctions.
- N/A France E3.3-7/1-1.4/1.1-1.5 bln 3/6/12-month BTF tsy note auctions.
- (0300 ET/0700 GMT) ECB/BdF Noyer speech at Paris BdF conference.
FX Recap
EUR/USD has been a strong performer since its recovery from below the 1.11 handle and has been up to test the mid-point of the 1.13 handle in early Asia. A calmer Asian session, with broad based USD weakness emerging the underlying theme across the FX space. With nothing significant on the macro calendar reported today, the Asian traders shifted their current week's Fed rate decision appear to have turned a bit cautious on Thursday. Today Europe will release Industrial production data. Pair is currently trading at 1.1341 levels. It made Intraday high at 1.1359 levels and low at 1.1323 levels. Initial support is seen around at 1.1015 and resistance at 1.1363 levels.
Japanese industrial output returned to red numbers in July, with worries about the increasing likelihood of a contraction in Japan's economy in the third quarter. The combined production from Japan's mines, manufacturers, and utilities fell 0.8% month-on-month in July, final data from the Ministry of Economy, Trade, and Industry (METI) showed on Monday, coming in worse than the preliminary result of a 0.6% decline. Production was flat at 0.0% annually in July, the final figure shows, and compared to a 2.3% advance in production a month ago. USD/JPY keeps range below 121 handle, consolidating the gains seen in the previous session. Pair is currently trading at 120.41 levels. It made intraday high at 120.84 and low at 120.26 levels. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.
The GBP/USD is trading with moderate losses after the BOE reported a drop in its gauge of 12-month inflation expectations. Sterling is trading flat at $1.5438, not far from last Thursday's high of $1.5476. It made an intraday high at 1.5458 and low at 1.5423 levels. Moreover, markets remain wary ahead of Thursday's Fed decision, on increased speculations that the Fed rate hike could be pushed back to early 2016, thus reducing the demand for the US currency. While the US calendar remains absolutely empty today, with the traders' now shifting focus towards Tuesday's economic releases from the UK. Initial support is seen at 1.5185 and resistance is seen around 1.5507 levels.
New Zealand's dollar managed to register some gains on Monday after taking a thumping on last week due to a dovish RBNZ. As expected the RBNZ cut rates to 2.75% but it was the dovish commentary from the bank which hit the kiwi yesterday. The bank still sees the New Zealand dollar as overvalued and signalled further monetary easing to come in the near future. It made an intraday high at 0.6344 and low at 0.6303 levels. Pair is currently trading at 0.6316 levels. As for China, the latest report showed over the weekend that the country's industrial production rose 6.1% in August year-on-year, up from 6% a month before, but weaker than the 6.5% growth expected by analysts. China's retail sales, however, hiked 10.8% on a yearly basis, better than in July and also beating estimates. Initial support is seen at 0.6195 and resistance at 0.6511 levels.
The Australian dollar was fading lower on Monday as there were no incentives for trading during the Asian session and the pair remains in a declining trend. Pair is supported above 0.7000 levels and trading at 0.7066 levels. It has made intraday high at 0.7135 levels and low at 0.7063 levels. Market will focus on monetary policy meeting minutes due for release tomorrow. Initial support is seen at 0.6908 and resistance at 0.7122 levels.
Equity Recap
Japan's benchmark Nikkei 225 index fell 0.22% to 18,224.04 points within the first hour of trade, while Tokyo's broader Topix gauge slid 0.09% to 1,478.93 points.
Hong Kong's benchmark Hang Seng index advanced 0.82% to 21,679.72 points at the opening bell, and mainland China's benchmark Shanghai Composite grew 0.63% to 3,220.31 points at the same time.
Korea's benchmark Kospi index slipped 0.18% to 1,937.87 points this morning in Seoul.
The benchmark Australian S&P/ASX 200 index traded 0.69% higher at 5,106.10 points in Sydney, with strong gains in media and banking shares.
New Zealand's benchmark S&P/NZX 50 index rose 0.35% to 5,667.90 points this afternoon in Wellington.
Australia's S&P/ASX 200 index closes up 0.62 pct at 5,102.70 points.
Tokyo's Nikkei average closes down 1.63 pct at 17,965.70
Treasury Recap
South Korea sells 10-year treasury bonds, dated June 10, 2015, at average yield of 2.260 pct.
China finance ministry auctions 2-year bonds at 2.6457 pct yield.
Thailand 14.9 bln baht, 28-day treasury bill average accepted yield 1.46110 pct.
New Zealand government bonds were largely flat with yields a touch softer on the long end of the curve.
Australian government bond futures were mixed, with the three-year bond contract off half a tick at 98.095. The 10-year contract was up 1.25 ticks to 97.2450.
Commodity Recap
Gold was trading near its lowest in a month on Monday, as investors waited for a Federal Reserve policy meeting later this week for clarity on when the U.S. central bank will hike interest rates. Spot gold was steady at $1,108.20 an ounce by 0310 GMT, after losing 0.3 percent on Friday. The metal had fallen to $1,098.35 in the previous session, its lowest since Aug. 11.
Oil fell on Monday after booking about a 3% loss for the past trading week, with analysts expecting another volatile week as the Federal Reserve (Fed) will decide on its monetary policy.Futures for WTI dropped 0.42% to trade at $44.54 per barrel, while Brent futures were traded 0.61% lower at $48.70 per barrel.
